The EUR/USD currency pair has been exhibiting a sideways trend after climbing above 1.0970 during the early hours of the Asian trading session. Market
The EUR/USD currency pair has been exhibiting a sideways trend after climbing above 1.0970 during the early hours of the Asian trading session. Market participants are eagerly awaiting the publication of US ADP Employment and ISM Services PMI data, which may impact the direction of the currency pair.US Dollar Index touches monthly low as Federal Reserve’s unchanged decision is anticipated
On Tuesday, the S&P 500 closed the day with losses as investors exercised caution ahead of US economic reports, resulting in a decline in risk appetite. The US Dollar Index (DXY) also reached a monthly low near 101.46 as market participants expected the Federal Reserve (Fed) to maintain its current stance during the May monetary policy meeting.
The CME Fedwatch tool suggests a 60% probability of the Fed keeping interest rates unchanged. The Fed is likely to concentrate on addressing shrinking manufacturing activities to avert a potential US recession. The upcoming release of US economic data on Wednesday should offer more insight.
Weakening job openings data signals cooling US labor market
The consensus indicates that the US economy created 200,000 new jobs in March, which is fewer than the previously added 242,000. However, if the US labor market maintains its tightness, there may still be room for one more rate hike from the Fed. On Tuesday, data showed a decline in job openings, falling to 9.9 million compared to January’s 10.5 million and market predictions of 10.4 million.
US ISM Services PMI forecasted to contract, keeping investors engaged
In addition to US employment data, investors are also closely monitoring the US ISM Services PMI. It is projected to fall from 55.1 to 54.5, while the New Orders Index, which indicates future demand, is anticipated to decrease from 62.6 to 57.6.
In the Eurozone, ECB policymakers are content as consumer inflation expectations for the next 12 months dipped to 4.6% in February, down from January’s 4.9%. Nonetheless, this data does not account for the recent surge in oil prices, which may alter the outlook. ECB President Christine Lagarde is expected to persist with rate increases.
EUR/USD Technical Outlook
The EUR/USD pair has experienced a surge, surpassing the resistance level of 1.0900 and is currently trading above it, signaling a positive trend for the day. The expectation is for further upward movement towards the next target of 1.1032.
The EMA50 supports the bullish trend, and the price is anticipated to gain positive momentum to reach the target.
The bullish trend is expected to persist in the upcoming sessions unless there is a break below 1.0880 and it remains below that level. The trading range for the day is projected to be between the support level of 1.0840 and the resistance level of 1.0990.
www.fxleaders.com